NEW YORK, Nov. 17, 2015 /PRNewswire/ -- Several shareholders have sent a letter to the Board of Directors of Ambac Financial Group, Inc. The full text is as follows:
November 17, 2015
Members of the Board of Directors
c/o Jeffrey Stein, Chairman of Board of Directors
c/o Nader Tavakoli, Interim President and Chief Executive Officer
Ambac Financial Group, Inc.
One State Street Plaza
New York, NY 10004
Dear Board Members:
We the undersigned - Queens Court Capital Management LLC ("Queens Court"), Gator Capital Management LLC ("Gator"), Anthology Capital LLC ("Anthology"), Trillium Fundamental Value Fund ("Trillium"), and Anabatic Fund L.P. ("Anabatic") – are shareholders of Ambac Financial Group, Inc. ("AMBC" or the "Company"). While we collectively own less than 5% of the outstanding shares of AMBC, for each of us AMBC represents a significant investment. To be clear, we do not currently have any agreement to act together for the purpose of acquiring, holding, voting or disposing of our shares, and are jointly signing this letter solely because we have each independently concluded that we support the views contained herein.
Each of us invested in AMBC because the Company is deeply undervalued and there are opportunities readily within the control of the Board to increase shareholder value substantially. Several of us have had private conversations with members of the management team and investor relations expressing our concerns particularly regarding a resolution to a permanent Chief Executive Officer – a matter that has been left open since December 23, 2014. Unfortunately, given the lack of progress and the importance to act with urgency, we have no choice but to share our thoughts publicly at this time.
- Resolution to full time CEO. As of the date of this letter, it has been nearly a year since Diana Adams resigned as President and CEO and the Board established a Search Committee to find a permanent CEO. While AMBC has made great progress over the past several years since emerging from bankruptcy, the Company is at a critical stage and needs a full time CEO to handle all the matters it faces from ongoing litigation, management of troubled policies, and developing a business plan for the future. Handling such delicate matters on an interim basis is sub-optimal and inappropriate. The Board's primary responsibility is to employ an executive to manage the organization and throw their full support behind the executive. By not resolving this matter immediately, we believe that the Board is acting irresponsibly and not in the best interests of shareholders.
- Support for Nader Tavakoli as full time CEO. We strongly urge the Board to remove the interim status and make Nader Tavakoli the full time Chief Executive Officer of AMBC. By doing so the Board will show its support for Mr. Tavakoli and empower him to resolve the numerous issues facing the Company. In the year under Mr. Tavakoli's "Interim" leadership, AMBC has made significant strides including a dramatic reduction in financial guarantees, further commutations and buyback of insured obligations, significant progress in the outstanding litigation cases, and an upward increase in adjusted book value. Indeed, it is our belief that despite the fundamental improvement in the past year, the overhang on the stock price is related to a lack of certainty surrounding the permanency of the CEO position.
- Ambac's Board responsibility are to its shareholders. Finally, we want to remind the Board that they have a fiduciary responsibility to shareholders of AMBC and that interests of shareholders are paramount to any concerns from other stakeholders. Many of us have heard of bondholders and other policy holders attempting to influence the Board and proposing matters that work counter to the best interests of shareholders. We urge the Board to reject any such proposals and note that Ambac's relationship with bondholders is contractual. Further, with respect to policyholders, Ambac's subsidiary, AAC, is in compliance with the Office of the Commissioner of Insurance, State of Wisconsin.
In conclusion, we believe the Board has a unique opportunity now to increase shareholder value by appointing Mr. Tavakoli as full time CEO. We urge the Board to act with urgency and we continue to think that the best step forward is to fully empower Mr. Tavakoli at this critical juncture. We hope that the Company will do the right thing and we intend to monitor closely the developments at the Company. We reserve our individual rights to take whatever actions in the future we independently believe may be required to protect the best interests of shareholders.
To reiterate the views expressed in this letter are of each shareholder individually. This letter should not be misconstrued as the formation of a formal or informal group.
Very truly yours,
Queens Court Capital
Gator Capital Management, LLC
Anthology Capital, LLC
Trillium Fundamental Value Fund
Anabatic Investment Partners, LLC
SOURCE Queens Court Capital Management LLC